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May 18, 2023
2023-0900

U.S. Tax This Week for May 19

Ernst & Young's U.S. Tax This Week newsletter for the week ending May 19 is now available. Prepared by Ernst & Young's National Tax Department in Washington, D.C., this weekly update summarizes important news, cases, and other developments in U.S. taxation.

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Top of the Week

Proposed regulations address IRC Section 1035 exchanges of interests in life insurance contracts under the reportable policy sale rules of IRC Section 101(a)(3)

The IRS has issued proposed regulations (REG-108054-21) that would modify the final regulations on transferring interests in life insurance contracts under IRC Section 101 and conform the requirements for information reporting under IRC Section 6050Y. Under the proposed regulations, when a life insurance policy is exchanged for another similar contract under IRC Section 1035, there would be no reportable policy sale, no transfer for value under IRC Section 101(a)(2) and, therefore, no limitation on the death benefit exclusion under IRC Section 101(a)(2). EY Tax Alert 2023-0879 has details.

Employers may be subject to government refund suits for employee retention credits even after the normal three-year statute of limitations expires

While the general three-year statute of limitations on assessment will expire on April 15, 2024, for 2020 employee retention credit claims (and April 15, 2025, for 2021 claims), the IRS has an additional two years from issuance of any refund to seek its repayment in court, even if the general three-year statute of limitations has expired. EY Tax Alert 2023-0887 has details.

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Upcoming Webcasts

Domestic tax quarterly webcast series: a focus on state tax matters (June 7)
During this EY Webcast, Ernst & Young professionals will discuss: (i) Potential US state and local tax implications of the OECD’s Model Rules for new global minimum taxes under Pillar Two of the BEPS 2.0 project; (ii) State income tax considerations of credits enacted under the federal Inflation Reduction Act; (iii) An update on state fiscal conditions; (iv) Highlights from the 2023 state legislative sessions; and (v) Other state tax policy considerations, including non-legislative developments.

Private equity and private capital quarterly tax webcast (June 8)
During this EY Webcast, Ernst & Young professionals will discuss recent global private equity (PE) industry trends and the outlook for changes relevant to PE and alternative funds, transactions, fund professionals, and portfolio companies.

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Recent Tax Alerts

Internal Revenue Service

— May 16: Tax M&A Update for April 2023 (Tax Alert 2023-0889)

— May 15: Employers may be subject to government refund suits for employee retention credits even after the normal three-year statute of limitations expires (Tax Alert 2023-0887)

— May 12: Proposed regulations address IRC Section 1035 exchanges of interests in life insurance contracts under the reportable policy sale rules of IRC Section 101(a)(3) (Tax Alert 2023-0879)

International

— May 17: EU finance ministers reach political agreement on updated compromise text for Directive introducing tax transparency rules for crypto assets (DAC8) (Tax Alert 2023-0897)

— May 17: Sweden to implement a new work permit processing system by end of 2023 (Tax Alert 2023-0895)

— May 17: Sweden considers proposed amendments to citizenship rules (Tax Alert 2023-0892)

— May 16: The Latest on BEPS and Beyond | May 2023 (Tax Alert 2023-0891)

— May 16: Bulgaria: Decision of CJEU on Bulgarian referral raises refund potential for certain VAT payments (Tax Alert 2023-0890)

— May 15: Kenya proposes tax changes under the Finance Bill, 2023 (Tax Alert 2023-0888)

— May 15: Costa Rica | Free Trade Commission eliminates customs duties for certain products from China (Tax Alert 2023-0886)

— May 15: Spain implements major changes in EU Blue Card regulations (Tax Alert 2023-0885)

— May 12: Brazil Senate approves Provisional Measure addressing new transfer pricing rule, enforceable from 1 January 2024 (Tax Alert 2023-0878)

— May 12: Greece's new immigration law to go into effect on 1 January 2024 (Tax Alert 2023-0873)

Legislation

— May 17: Executives of failed banks SVB and Signature testify at Senate Banking Committee (Tax Alert 2023-0896)

— May 17: What to expect in Washington (May 17) (Tax Alert 2023-0893)

— May 12: Senate Health, Education, Labor and Pensions Committee advances four bills addressing generic drug access and PBMs (Tax Alert 2023-0875)

— May 12: Senate Finance Committee holds Rx, international tax hearing (Tax Alert 2023-0874)

— May 12: Senate Health, Education, Labor and Pensions Committee hearing on affordable insulin (Tax Alert 2023-0872)

States

— May 17: EY special report provides insights into employer compliance with federal and state Form W-4 rules for 2023 (Tax Alert 2023-0898)

— May 12: Indiana law gives nonresident income tax and withholding relief for short-term business travelers and their employers (Tax Alert 2023-0871)

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IRS Weekly Wrap-Up

Revenue Procedures

 2023-23Tax forms and instructions

Revenue Rulings

 2023-10Section 1274 - Determination of issue price in the case of certain debt instruments issued for property

Notices

 2023-40Update for weighted average interest rates, yield curves, and segment rates

Internal Revenue Bulletin

 2023-20Internal Revenue Bulletin of May 15, 2023

Because the matters covered herein are complicated, U.S. Tax This Week should not be regarded as offering a complete explanation and should not be used for making decisions. Any decision concerning matters covered herein should be reviewed with a qualified tax advisor.

 

The information contained herein is general in nature and is not intended, and should not be construed, as legal, accounting or tax advice or opinion provided by Ernst & Young LLP to the reader. The reader also is cautioned that this material may not be applicable to, or suitable for, the reader's specific circumstances or needs, and may require consideration of non-tax and other tax factors if any action is to be contemplated. The reader should contact his or her Ernst & Young LLP or other tax professional prior to taking any action based upon this information. Ernst & Young LLP assumes no obligation to inform the reader of any changes in tax laws or other factors that could affect the information contained herein.

 

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